Friday, July 27, 2007

EU to lift 66% trade tariffs on Chinese light bulbs

According to the Associated Press the EU has said that it plans to lift trade charges on Chinese light bulbs despite German complaints.

At present energy saving light bulbs made in China have a 66% trade tariff added to their cost when they are imported into the EU.

This "tax" has protected EU-based light bulb manufacturers from Chinese imports for several years, but this protection mechanism has looked vulnerable ever since the EU's leaders announced that they wanted to make the carbon savings associated with using more energy efficient lighting.

The following AP article suggests that Philips (in Holland) has prepared for this eventuality by setting up manufacturing capacity in China whilst others manufacturers, such as Osram (in Germany), have not built any manufacturing capacity in China and will therefore suffer a loss of market share when this tariff is removed.

Issues which will now come to the fore include the quality of the energy saving light bulbs made in China (especially in relation to mercury content, life-time and light quality) and the carbon emissions associated with transporting light bulbs from China to the EU. The minimum standards set by the EU when they phase out traditional domestic incandescents in 2011 will therefore have added significance.

The Associated Press

BRUSSELS, Belgium: Charges that raise the price of Chinese-made energy-efficient light bulbs should be scrapped, European Union regulators said Thursday.

The European Commission said it planned to lift antidumping duties on power-saving bulbs made in China that raise prices for European customers by two-thirds. The commission came out against Germany's Osram AG, which has pushed to keep the duties in place, claiming below-cost imports are unfair to European manufacturers.

EU spokesman Peter Power said Osram was trying to damage Dutch rival Royal Philips Electronics NV, which makes bulbs in China. The EU will suggest lifting the duties in the coming months, he said.

"Osram is seeking to continue antidumping measures because they hit Philips proportionately harder," Power told reporters. "It is a question of commercial competition between two European companies."

It is also a question of saving power and reducing greenhouse gas emissions. Lighting is a major drain on the power grid, and the EU aims to cut both energy use and carbon dioxide releases by a fifth by 2020.

Shifting to eco-friendly bulbs will soon be mandatory, as the EU plans to set new efficiency standards for all lights used in homes and workplaces and on streets. Most lamp manufacturers have agreed to phase out standard incandescent light bulb within eight years.

But the higher cost of greener bulbs has deterred customers. Since 2001, the EU has slapped a 66 percent duty on imports of fluorescent bulbs from China because European producers claimed they were unfairly hurt by low-cost bulbs being dumped on the European market.

Those fees were due to expire July 19, after five years. But they are still in place while the EU's executive arm holds talks with national trade experts — including Germany, which wants to keep the duties in place.

Power said a meeting Thursday would discuss the problem, but would make no final decision. A definitive proposal, including the suspension of the duties, was expected within months.

He said Osram was not the voice of besieged European manufacturers, and noted that Philips, General Electric Co. and Havells Sylvania together make more bulbs in Europe than Osram does. To complicate matters further, like Philips, Osram also makes bulbs in China that are sold at dumped prices.

A group of EU importers, the Foreign Trade Association, called on national governments this week to lift the duties.

The EU has investigated a host of complaints from European companies in recent years claiming their shoes, furniture and DVDs have unfairly lost ground to a wide range of Chinese-made products sold below cost in Europe, breaking world trade rules.